The Turkish Central Bank said on Wednesday that it had tripled the size of a currency swap agreement with Qatar to the equivalent of $ 15 billion from five billion, in an agreement providing much-needed foreign liquidity.
The Central Bank of Ankara explained that the amendment of the swap agreement, which dates back to the year 2018, aims to facilitate bilateral trade in the local currency and support financial stability in the two countries.
The Turkish currency touched an unprecedented low level earlier this month as investors feared the decline in the central bank's net foreign exchange reserves and Turkey's relatively high external debt obligations, prompting officials to seek financing from abroad.
Of note, officials from the Turkish Treasury and the Central Bank opened their counterparts in Qatar and China about increasing the size of existing swap lines, and also spoke with Britain and Japan regarding the possibility of establishing similar facilities.
The Turkish Central Bank said that the amendment of the swap agreement concluded in 2018 with the Qatar Central Bank aims to "facilitate bilateral trade in the local currency as well as" to support financial stability in the two countries.
Analysts say that if Turkey fails to secure financing in the tens of billions of dollars, it will risk the collapse of its currency, as happened in 2018, when the lira briefly lost half its value in a crisis that shocked emerging markets.
According to the facility, the exchanges will take place in Turkish lira and Qatari riyals.